Students Face Challenges Over Home Buying

News Source: http://www.consolidatemydebts.ca/

Buying your first home is never a cheap process and most of us will initially struggle, but it is much more difficult for students who can graduate with substantial amounts of debt. This means they often need to earn substantially more money in order to buy a home. An estimate by RealtyTrac found students typically need annual salaries of approximately one third more compared to those first time buyers without student debt. This equates to around $8,700. ReatlyTrac arrived at this figure by taking the median home price for each county and state, and calculating the minimum amount needed to qualify for a loan on this home. This assumed the buyer had a 20% deposit and was based on a 30 year 4.13% loan.

The article in the Wall Street Journal does point out that this figure is dependent on where the student is living, and the average amount of student debt can vary from state to state. Interestingly, some of the areas with the most expensive housing also have the lowest rates of student debt. A good example is California, where house prices are amongst the highest in the country, yet it has one of the lowest levels of student loan debt. Those states where graduates with student loans need to make more income to qualify for loans, compared to those without debt include Pennsylvania at 49%, Ohio at 53% and Michigan at 55% and Rhode Island at 56% and Connecticut at 58%. In comparison, students in California only need to earn 12% more than graduates without student loan debt. This figure is 17% for New York and Virginia, rising to 19% for those in Wyoming, and to 20% for graduates in Utah. The good news is that graduates with student loans, and who are earning the median household income for the US are able to afford the monthly payments on median priced homes in 96% of the markets analyzed by RealtyTrac. Apparently a graduate with a bachelor’s degree can expect a starting salary averaging $45,000, but is likely to have an average of $33,000 debt, a figure that has tripled in the last two decades. However other figures show that graduates who have managed to find well-paid jobs are pretty lucky, as around 40% of those unemployed are millennials, and many are either college age or recent graduates. In addition, recent graduates with student loans seem to find it harder to build wealth.

Six Signs Your Clients Are Ready To Take The Plunge

News Source: http://www.consolidatemydebts.ca/

Are your clients looking to build their portfolio with investment properties? Help potential investors decide if now is the right time jump into the real estate market. Here are six signs, according to the international property website Lamudi.com, that they’re ready to make the investment plunge.

1. They are financially secure: Your investors will need enough for a downpayment and an emergency fund for maintenance expenses. Make sure their credit history is good and they’ve met all their financial obligations.

2. They have long-term goals: Your clients should have a clear picture of the purpose of their investment. Is it to live in part of the year? Is it for long-term portfolio growth? Ask them what they hope to accomplish so you can best serve them.

3. They’ve done their research: You clients should know the community of their future property well enough to foresee the coming trends and the possible changes. Is it a budding resort hotspot? Is the commercial sector booming? Is there a need for residential growth? If they aren’t familiar, it’s up to you as a real estate practitioner to educate them.

4. They’ve chosen a stable economy: Make sure the economic trends are promising in the area where your clients are looking to invest.

5. Going international? Investors should understand the country’s real estate policies: Make sure your clients understand home ownership regulations and laws, as well as tax policy in the country where they’re looking to invest. They should also be aware of all cultural differences that might come up during the transaction. Read more: “Go Global: 5 Tips to Get Started.”

6. Property values are expected to increase: Are your clients considering an investment in a developing area? Make sure infrastructure projects are underway that will likely to lead to an increase in property values, such as transport, energy, solid waste, water management, and commercial developments.

Condo Scene: More parents buying units for university-bound children

News Source: http://www.canadianmortgageupdates.ca/

Unless you’ve had your head in the sand, you know it’s almost September, thanks to stores advertising pencils and notebooks, fall clothing and back-to-school discounts. While many might feel summer has barely started, it’s true that fall is closing in on summer’s heels. And as many university students prepare for the fall semester, their parents are considering student housing options.

Those who live within an easy commute of school have the most options.

The first, and most obvious, option is living at home. It’s comfortable, the least expensive choice, and offers the possibility of some ongoing parental supervision. But living at home can mean your child fails to learn important life lessons such as financial management and cooking and cleaning skills.

The second choice — dormitory life — is the most popular one for first-year students. It’s a way of taking a step toward independent living without having to jump in with both feet.

But by second year, these students are often ready to move on to their first grown-up apartments. And that has led to a new trend in condos: parents who purchase units as an investment and have their children as tenants.

There are many advantages to this strategy. First, you have an investment property that may accumulate in value.

Second, you are more likely to be able to provide your child with a secure building in a safe neighbourhood if you are shopping for a place to live on your budget, rather than a student budget. Have you heard the saying, “champagne taste on a beer budget”? Essentially, your child is living this motto, and you can rest easy knowing that they are living in a safe place.

It may also be a beneficial arrangement for you. If you were already looking to purchase an out-of-town investment property, there’s a better chance it will be taken care of when you’re not there. And when you are in town, you’ll save on hotel bills by bunking with your child.

Ottawa is fortunate to have many condominium offerings near Algonquin College, Carleton University and the University of Ottawa, but this trend of having parents buy a unit for their child’s university years is most popular in other cities, like Montreal, Toronto and New York.

The number of Ottawa parents pursuing this strategy seems relatively small, according to an informal poll of new condo development sales staff, but out-of-province buyers purchasing for their children here make up about seven to 10 per cent of the condo sales in newer developments.

The biggest reason parents will buy is for the long-term investment. They tend to keep finishes basic and upgrades to a minimum, unless they’re purchasing a condo they will later occupy full time. The idea is to have a clean, safe environment for the student to study and get good grades.

In general, parents do not see the move as a simple investment strategy, but rather as something that will meet their children’s needs and then be sold or later rented out, possibly to other parents in the same situation.

The attractiveness increases for parents with several children who are likely to need housing one after the other, which gives the investment more time to mature.

Although at first glance buying a new condo for this purpose may seem expensive, when the financial and other pros and cons are laid out it may make sense for your situation. With all the condo buildings coming up around the city, you are sure to find one that appeals to you, as an investor or as a parent.

If your child does not drive, for instance, avoid a building in an area with limited pedestrian activity. If, however, your child does drive, ensure the building offers parking, either included in the purchase or as an added feature.

As a first step, create a pros and cons list to ensure you’re meeting both your needs and those of your student.

Multiple Ways to Improve Your Rental Business

News Source:http://www.canadianmortgageupdates.ca/

There are several ways to save time and money in the landlord business. Some of the ideas shared here are probably familiar to you and some might not apply but some will. If you have ideas about saving time and money managing rentals please share with others by posting them in the comments below.

1. Paint every unit, every room, every wall, and every ceiling with the same brand and color of paint. You’ll never waste anther can of paint. You’ll never have trouble figuring out what brand and color you need to do a little touch up. Painters will save time and money when they can spray an entire room instead of having to roll it.
2. When sinks, faucets, and other hardware needs to be replaced, do the same thing you did with the paint. Standardizing all the hardware in all of your rental units makes future repairs easy and less expensive.
3. Save the bottoms of your cabinets under sinks by putting some scrap floor vinyl down there. Slow drips won’t slowly rot away the cabinet bottom nor will a spilled caustic cleaning solution eat away at it.
4. Keep appliances looking sharp instead of replacing them. Appliance stores sell a special appliance paint that makes slightly rusted or discolored appliances look like new again.
5. Did a tenant put a fist hole in a hollow bedroom door? Instead of replacing the door, purchase a $6 mirror at Wal-Mart and screw it onto the door to cover the hole. This actually makes the room or hallway look bigger and brighter.
6. Splintered and damaged cabinet drawers in the kitchen? Often, you can pop out the bottom of the drawer and turn it over to make it look like new again. Using a good strong adhesive to glue it back in place will make it stronger and you’ll get twice the life out of it.
7. Tenant retention ideas. Frequent tenant turnover is hard on the unit as well as causes you a month or so of lost rent. Shortly before a tenant’s lease expires, offer to make one upgrade to the unit of their choice (put a price cap on it). Also, make your tenants feel like you care about them. Once a quarter send them a note asking if there is anything you can do for them. This also gets tenants to tell you about things that need repair before the problem gets worse.
8. Use KwikSet Smartkeys when replacing locks. These allow you to change locks in just a few minutes and replacement lock cylinders only cost about $5.
9. If your rentals have wooden steps at the entry, these can become slippery when wet. Tacking down roof shingles is fast and easy and will improve your tenant’s safety and possibly save you from a lawsuit.
10. Make your units show better by improving the lighting. Previous tenants probably replaced burned out bulbs with low wattage bulbs to save on electricity. Replacing these with higher wattage bulbs makes the unit brighter and feel larger. Potential tenants will remember it over other rentals they view.

In Toronto, When A House Doesn't Sell, The Price Goes UP

News Source: http://www.canadianmortgageupdates.ca/

Bidding wars have become commonplace in the Toronto housing market, with many realtors saying they hit a fever pitch this spring.

Though “sellers love it,” largely because they drive up the price of houses, many observers argue it’s a sleazy practice, particularly when sellers low-ball the price of a house to get buyers excited — only to see the price inflated enormously by a crowd of bidders.

In perhaps the most egregious example yet, a five-bedroom house in the Yonge and Lawrence area listed for $699,000 this past April, well below the going rate for a standalone house in the area, where most these days are listed above $1 million.

The house attracted 72 offers and sold for nearly double the asking price — $1.36 million.

But as spring moved into summer, apparently the bidding wars slowed down, according to an article in the Globe and Mail. Which means that some buyers are putting their houses on the market at a lowballed price, and not getting the huge markup they had been expecting.

Their reaction? Take the house off the market, and relist at a higher price.

That tactic alienates a lot of buyers, the Globe cites real estate agents as saying — especially those buyers who put in bids for the house at a lower price.

And it’s a sign that Toronto’s housing market — or at least the single-family home segment — has been so hot, for so long, that sellers’ expectations are becoming very lofty.

But with buyers taking advantage of record-low mortgage rates, many are willing to meet those expectations, particularly for single-family homes in the 416, as very few of these are being built anymore.

By one measure, the average price of a single family house in Toronto hit the $1-million mark earlier this year, though the city’s real estate board pegs it closer to $865,000.

That’s still up 8.8 per cent from a year earlier, and sales volumes are up 18.5 per cent.

But new listings are also up, by about 9.7 per cent for all housing types, which may be one reason why bidding wars have slowed down recently.

Toronto Real Estate Board analyst Jason Mercer told the Globe it’s conceivable the supply of new listings will continue to grow in the second half of the year, in which case price growth could slow down in some parts of the market.

But with sellers so confident of the market that they raise prices when a house doesn’t attract enough bidders, even a mild slowdown in price growth could prove to be a shock.

Memphis Is About the Whole Hog

News Source: http://www.canadianmortgageupdates.ca/

Memphis doesn’t mess around when it comes to BBQ. They call their title BBQ contest the World Championship of BBQ and the most coveted prize is the Whole Hog. But there is a Grand Champion that enters multiple categories. Teams come from around the globe to be judged in the Memphis World Championship of BBQ. For 2014, the Grand Champion is Big Bob Gibson Bar-B-Q from Decatur, Alabama. The whole hog winner is Yazoo’s Delta Q from Hernando, Mississippi. But interestingly, second place in the whole hog competition went to British Bulldog BBQ from Farnham, Surrey, England.

What’s in a BBQ Title? For many, the Memphis World Championship of BBQ is considered the Super Bowl of Swine. First established in 1978 with only 26 teams competing, this year there were 244 teams competing for $110,000 in cash prizes. But it’s really about the bragging rights that come with a title much more than the money because entry fees can be as high as $5,000 depending on how much real estate you need to set up your BBQ operation. And that’s before you create your one-of-a-kind slow roaster (this year one was made from a 1954 Willys Jeep) and all of the other creative makings for your BBQ camp. The Memphis World Championship is one of the three biggest competitions in the nation (probably the world) and the only one to include the category of “Whole Hog”. The competition is spread out over four days. Big Bob Gibson Bar-B-Q didn’t just win the grand championship this year, they set a new record as the winningest team with their fourth championship and with a fourth win in the pork shoulder category.

What Goes in a Winning Recipe According to Big Bob, it’s mostly time, smoke, and fire. His process takes 20 hours to smolder the perfect piece of pork. He started Friday afternoon by injecting an apple-juice based brine into the pork and applying his secret rub before beginning the smoking over a 225 degree fire. It’s an all night endeavor in preparation for the judging on Saturday at 11 o’clock. He smokes the 20 pound piece of meat for 18 hours and lets’ it rest for an hour before judging. Resting is taking the meat off the smoke to allow the juices to redistribute themselves throughout the large piece of meat.

Judging Hogs Judging at the Memphis BBQ World Championship is a slightly complicated process. There are three rounds of judging. First, there are four judges that have to take an eight-hour class on judging BBQ that then are presented with six “blind” boxes of meat from each category. They are only allowed to give a perfect score to one box per category. Next comes the controversial on-site judging by expert BBQ chefs. This is the judging where the contestants serve up their best cuts of meat. It’s controversial because the cooks are allowed to put up a white tablecloth with arrangements (such as flowers) and B.S. with the judges to improve their scores.

After the first two judging rounds, the scores are announced. The top three teams from each category (ribs, shoulder, and whole hog) are given two hours to prepare for the final judging. The final judging is a lightening round visit by four judges all at once. Presentation is just as important as taste because the difference in final scores is often no more than a few hundredths of a point.

That hundreds of a point win gives the BBQ chef bragging rights as the winner of the Memphis BBQ World Championship. What follows is a two block long line of high paying customers outside of your restaurant back home and several TV appearances. In the case of the 2013 winner, it became a TV series on the Food Network. It’s all about the championship title.

Fast Paced Rehabbing You Need to Know

News Source: http://bestmortgagebrokers.net/ 

When it comes to managing a rehab, the number one thing to always remember is “time is money.” Not only do you have the cost of capital but the sooner you complete the rehab, list it for sale, get a buyer under contract, and close on the sale, the sooner you can find another deal and do the process all over again. The goal is to be as efficient as possible.

Before Closing

Once the offer is accepted to purchase a property, you usually have a couple of weeks to a month until you actually close on the purchase of the property. During that time, the following steps should be taken:

• Budget Created: Once the offer is accepted, go back to each item of the rehab and solidify the numbers. Using a detailed rehab checklist, confirm your numbers by getting quotes from contractors. For example, this is when your roofing contractor physically measures the roof and gives you a quote for the exact cost to replace.

• Create the Rehab Plan. Once you’ve finalized the costs, you create the rehab plan. The rehab plan is an outline and tentative schedule of the work being done. This is when contractors are tentatively awarded the job and given a tentative date of when they will perform their scope of work. The goal is that when the property closes, everybody is on board. The dates are tentative because everything is subject to the timeline going as planned but throughout the project, all contractors are aware of the timeline so that when their turn comes, they are available and ready.

Day of Closing

On the day of closing, the rehab plan is implemented immediately. The dumpster arrives at the property and the demo crew starts.

The key to a successful rehab is constant oversight!

Not a day goes by when progress isn’t being made. Everyday counts and so everyone needs to keep to the schedule. Because of the fast-pace, contractors must work well together (play nice). In many cases, their work will overlap with two or more contractors working in the same tight quarters. One of the requirements to work on your rehabs should be a team player. A team player looks out for the good of the entire project, not only their small part. A team player sees the bigger picture.

Issues Addressed Immediately

If you’ve got a contractor that’s not being a team player it’s addressed immediately and if it’s not corrected then they’re no longer on your team. For example, recently an electrician wasn’t cleaning up after himself. He was leaving his scrap wire, empty boxes, drywall debris, etc., scattered around the work site. This was affecting the other contractors. Fortunately, he is a team player and after addressing the issue, it was resolved quickly. On the other hand, a drywall contractor was terminated for not showing up on time and delaying the project, which affected everyone else.

Over-Committed Contractors

It’s not uncommon for contractors to over-commit and pick up more jobs then they can handle. When you inform your contractors ahead of time of the rehab timeline, there is no excuse for not being at your job when expected. But realistically, it happens. If a contractor flakes out or they’re not there when they’re supposed to be or they’re not keeping to the schedule like they’re supposed to, you need to address it immediately. The old saying, “The show must go on” holds true with rehabs and a new contractor will be brought in to keep on schedule. Let your contractors know that “You’re not running a day care, you’re running a business.” In all honesty, if expectations are explained up front, problems are greatly minimized.